Federal Court Finds Colorado Renewable Energy Standard Constitutional

DENVER – In a major victory for renewable energy and for states’ power to expand clean energy development, the federal District Court for the District of Colorado today affirmed the Colorado Renewable Energy Standard (RES), rejecting attacks based on the federal dormant Commerce Clause. The Court dismissed a lawsuit brought in 2011 that challenged the RES requirements, claiming that these renewables interfered with interstate commerce because they reduced demand for non-renewable sources.

Judge William Martinez found that the challengers had “failed to show that the RES burdens interstate commerce at all, much less that any such burden is clearly excessive in relation to the benefits conferred on the state by the RES.” The State of Colorado has identified economic, environmental, and other benefits of renewable energy from wind, solar and other sources. The Judge stressed that courts should not “second-guess the … judgments of lawmakers” or voters regarding benefits of renewable power.

Across the nation, 29 states and the District of Columbia have adopted mandatory renewable energy standards (also called renewable portfolio standards, or RPSs) and 8 states have adopted voluntary renewable energy goals, which have proven effective in deploying wind, solar, and other renewable energy. Renewable energy benefits consumers by locking in low energy costs at fixed prices for 20 years or longer, having no fuel costs to pass through to consumers, improving air quality, providing water savings, and enhancing overall system reliability. Accordingly, the Court’s ruling today is a major victory as it upholds the state RES as a legitimate and constitutional approach for states to diversify energy portfolios and derive benefits while charting a clean energy future.

Colorado voters originally approved the RES in 2004 to require that Colorado electric utilities provide a portion of their electricity from renewable energy sources. The Colorado Legislature has expanded the RES three times since the voters approved the original RES in 2004.

The RES requires that thirty percent of electricity from investor-owned utilities such as Xcel Energy and Black Hills be generated from renewable sources, with similar standards for municipal utilities and rural electric cooperatives. While the low cost and stable rates of Colorado renewable energy are expected to save consumers money over time, the RES includes consumer protection provisions that limit any near-term rate impacts to a maximum of 2% increase per year, with no cap on rate decreases.

Interwest Energy Alliance intervened in this lawsuit on the side of the State of Colorado to defend it against the groundless constitutional arguments. “It was essential to protect the vote of the people and their elected representatives in support of Colorado’s clean energy future,” said Sarah Propst, Executive Director of the Interwest Energy Alliance. “Colorado voters and the Colorado General Assembly showed tremendous leadership in passing measures to enhance the state’s economic competitiveness. The Court has confirmed that the people and the Legislature can shape their energy future.”

“Colorado utility customers are already benefitting from affordable, predictably priced renewable energy,” said Propst. “And Colorado communities and families are benefitting from clean-energy jobs. Today’s ruling confirms that Colorado will continue to reap these benefits.”

The renewable energy industry has responded to the current RES with significant investments in electricity generation projects and manufacturing facilities, employing nearly 10,000 Coloradans and pouring millions of dollars in annual lease and property tax payments into rural Colorado communities. Colorado has over 2300 megawatts of wind and over 300 megawatts of solar installed to date, with hundreds of additional megawatts under construction.

“This was a big win for states’ ability to direct growth in renewable power generation,” said John Putnam of Kaplan, Kirsch & Rockwell, L.L.P., an energy attorney who represented Interwest Energy Alliance in this case. “The Court made clear that the Constitution allows states to decide that a percentage of the electricity used in their states should come from clean energy sources. This is an important ruling for Colorado and the other states with a renewable standard.”

# # #

The Interwest Energy Alliance (www.interwest.org) is a trade association that represents the nation’s leading companies in the renewable energy industry, bringing them together with the West’s leading non-governmental organizations to facilitate consensus-based approaches to new project development throughout the region.

Leave a Reply